this post was submitted on 29 Apr 2025
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Is it greedy landlords? Or is there a bigger issue at play, and landlords are the scapegoat? I imagine not all landlords are greedy, but if market price is $1,600, why wouldn’t the landlord charge $1,600?
Because after construction costs have already been paid off everything that exceeds maintenance costs is pure profit for landlords.
Wanting to increase profis beyond the inflation rate to cover their own costs of living is greed.
You’re just saying “capitalism is greed”. Which is fine, and not wrong, but it Isn’t all that insightful and does nothing to solve any actual problems.
Fact is, supply and demand is driving these costs, not greedy landlords. If somebody wasn’t paying that rent, they wouldn’t be charging that much.
We need to prioritize building low income/affordable homes. Flood the market with supply and the price will go down.
In an abstract economy 101 sense that is true.
In a more concrete real world sense, the price is set by the landlord. Neither the supply nor the demand curve force the landlord to increase rent.
That too is somewhat true. In a profit oriented market however the lower bound of the price of rent is dictated by the building costs, the time it takes to recuperate these costs and the expected profit margin.
Assuming building costs are more or less fixed in the short term, flooding the market and reducing the price you can charge will reduce potential profits. Thus private investors are incentivized to build only so much that it does not significantly lower prices.
So, the "we" that could lower prices by building more would have to be the state or some public entity that is less profit focused, not private landlords.
The price is set by the landlord based on what people are willing to pay. What people are willing to pay is based on what is available in the market.
This is all just supply and demand. If a landlord has an empty home for rent, and there are no other homes for rent nearby, they can charge whatever anybody is willing to pay. If there are 3 empty homes right nearby, they will need to price it in line with the others.
Or the local/state governments need to create zones for lower/middle income homes or apartments. Or in some way they need to encourage developers to build these homes.
Capitalism alone gives us the current situation. Having a government that can counterbalance this will make it work.
What people are willing to pay sets the upper limit of what he can charge. He is not forced to set the price at this upper limit. No amount of demand forces him to increase the price beyond cost + enough profit to live off.
I'm not sure how zoning in the US works. How exactly does this reduce construction costs or increase return on investment without high rents? What incentive does this give profit oriented investors to invest in affordable housing instead of other investment options?
It’s no different than any other product you could buy in a store. Supply and demand ultimately determines the price. Charging what it is worth is no more greedy than any other aspect of capitalism. And as I said originally, maybe there are bigger issues than just “greedy landlords” that are causing the prices to go up so much, in this case unchecked capitalism.
Zoning is just one example. Part of the problem is that someone that just bought a million dollar home doesn’t want multi family homes built across the street. That will decrease the value of their house. Zoning plays into this. There’s plenty more state/local governments can do, but are not doing.
It’s interesting that when talking about the people building homes, you totally get the profit driven mentality. Why should we expect investors to build homes that would give them less profit? Exactly, and why would you expect landlords to charge less than what the home is worth? Why would Nike charge $50 for those shoes when they can charge $200 and still sell out immediately?
There’s lots to consider and saying “greedy landlords” is the problem just ignores the entire reality.
To be clear, I am making one statement in this discussion and that is that the price is being set higher than it needs to be.
By stating that int he discussion about Landlord greed, it can be inferred that I equate this with greed.
Saying that other businesses operate similarly does not refute my point. As you yourself pointed out, at best your argument is that all "capitalism is greed".
I never pretended not to "get" it. I'm just claiming that it's greedy.
The way I see it there are two ways to counter my argument:
Either show that landlords have no choice and must demand the prices they do.
Or argue that wanting more than you need (usually to the detriment of others) is not greed. In that case I would be very interested where greed actually starts.